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Share Name Share Symbol Market Type Share ISIN Share Description
Arrow Exploration Corp. LSE:AXL London Ordinary Share CA04274P1053 COM SHS NPV (CDI)
  Price Change % Change Share Price Shares Traded Last Trade
  -0.25 -1.54% 16.00 123,314 08:49:26
Bid Price Offer Price High Price Low Price Open Price
15.50 16.50 16.00 15.75 15.75
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Aerospace & Defence 5.30 3.23 4.44 3.3 34
Last Trade Time Trade Type Trade Size Trade Price Currency
09:16:25 O 24,770 16.10 GBX

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DateSubject
29/6/2022
09:20
Arrow Exploration Daily Update: Arrow Exploration Corp. is listed in the Aerospace & Defence sector of the London Stock Exchange with ticker AXL. The last closing price for Arrow Exploration was 16.25p.
Arrow Exploration Corp. has a 4 week average price of 13p and a 12 week average price of 12.75p.
The 1 year high share price is 20.50p while the 1 year low share price is currently 6.75p.
There are currently 214,104,643 shares in issue and the average daily traded volume is 1,606,986 shares. The market capitalisation of Arrow Exploration Corp. is £34,256,742.88.
26/6/2022
16:25
mount teide: Oil Giants Warn Of Much Higher Prices For The Next 3-5 Years Amid Lack Of Supply - Tyler Durdan - 24 June 'It wasn't just the epic confusion unleashed by the Biden admin in the past few days over how to lower record gas prices (suggesting that Biden really has no idea what the 79-year-old president is doing), that sparked today's jump in crude oil and surge in energy names. Providing some bullish support for oil, in his latest weekly note, Bank of America's energy analyst Fernando Blanch writes that even if the world goes into recession, Brent oil could average more than $75/bbl next year. Here is some more from his summary: * As Europe targets Russian oil export reductions, the energy supply side needs more than just a price fix. Investors are looking to curb exposure to the energy sector too on ESG concerns. Also, US shale supply has become much less sensitive to price. What does this mean for balances and prices? * If Russian oil supply does not drop below 10mn b/d, global oil demand could grow by 1.7mn b/d in 2023. * Having averaged $104/bbl this year, BofA stills see Brent at $102/bbl in 2022 and 2023 on average, with a potential spike to $150/bbl if European sanctions push Russian oil production below 9mn b/d. * Yet the market does not seem to be pricing in a decade-long Russian supply crisis, as long dated oil prices have stayed firmly anchored in our long term oil price band of $60 to $80/bbl. A similarly bullish message, yet one where there was much more book talking, came from Exxon Mobil, whose CEO said that global oil markets may remain tight for another three to five years largely because of a lack of investment since the pandemic began. Chief executive Darren Woods said it’ll take time for oil firms to “catch up” on the investments needed to ensure there’s enough supply. Woods was speaking at the Economic Forum in Qatar, which is among the world’s biggest exporters of liquefied natural gas and one of few nations that can substantially replace Russian gas supplies to Europe. Firms including ConocoPhillips are investing in a $29 billion project to boost Doha’s exports. On Tuesday it emerged that Exxon is also one of the bidders and Qatari Energy Minister Saad Al-Kaabi, speaking alongside Woods, said the US firm would get a stake. The project is one of the largest in the gas industry and state-controlled Qatar Energy is scheduled to formally announce a deal with Exxon later on Tuesday. Incidentally, Exxon got some more good news today when Credit Suisse upgraded the stock to a buy with a $125 price target, with CS analyst Manav Gupta writing that Exxon “always believed that the world will need fossil fuels for much longer and in the medium term demand for oil and gas will be increasing not contracting" and adding that “while some of XOM’s peers have been selling refining assets at the bottom of the cycle at distressed valuations, XOM has actually been investing in its refining assets,” Gupta wrote. Notably, the CS analyst also sees XOM reducing net debt and being in net cash position by 2024. Woods message was also echoed by Russell Hardy, the CEO of the world's largest independent oil merchant, Vitol; he too believes that oil prices will remain high because the market can’t see where additional supply is coming from to balance demand, although he noted that high oil prices are starting to curb demand “at the edges” (many others, such as the gas buddy guy, disagree, failing to see any slowdown in demand despite record high gas prices). Finally, and ensuring that gas prices aren't going lower any time soon, in a world where refining capacity is approaching the lowest in years, China’s state-run refiners again trimmed operating rates to 70.8% in the week ended June 17, from 71.3% the prior week according to Citic, which also noted that run rates for teapots edged higher to 65.6% from 64.4%.'
14/6/2022
10:38
mount teide: "I've never seen this combination of circumstances in my career over the last 50 years," Gary Ross, manager at Black Gold Investors, a hedge fund, told Bloomberg last week. "The world has very little spare capacity, the economy is strong outside of China, China is now coming back and we're in the midst of a global oil interruption." "If we continue consuming, with the pace of consumption we have we are nowhere near the peak, because China is not back yet," the UAE's Energy Minister Suhail Al-Mazrouei said last week, as quoted by Bloomberg. "China will come with more consumption." The Oil Price Rally Shows No Sign Of Slowing - Oilprice.com * With the return of Chinese demand hanging over oil markets, analysts are becoming increasingly bullish. * Gasoline prices have hit their highest level ever and there are no signs of that rally slowing. * In an effort to cool the oil price rally, OPEC+ increased its production quota, a move that resulted in renewed fears of falling spare capacity. The U.S. national average for gasoline hit $5 per gallon last week, the highest ever. Brent crude is trading at $120 per barrel and is unlikely to subside much further as China comes back in full force. And according to the UAE's Energy Minister, we haven't even reached the peak — or anywhere near it. "I've never seen this combination of circumstances in my career over the last 50 years," Gary Ross, manager at Black Gold Investors, a hedge fund, told Bloomberg last week. "The world has very little spare capacity, the economy is strong outside of China, China is now coming back and we're in the midst of a global oil interruption." The world's shrinking spare capacity has recently come into the spotlight after OPEC+ decided to increase their production targets for July and August in a bid to quench worry about runaway energy inflation. Yet the decision on paper may never translate into action with just a handful of OPEC+ members having the spare capacity to boost production meaningfully, and according to analysts, they might not be willing to tap their spare capacity as this would reduce the available capacity cushion further, making producers less flexible in case of a production outage such as those that regularly plague Libya, for example. Meanwhile, demand for oil remains robust, lending additional upward potential to prices, with industry observers and analysts expecting much higher prices before their level starts to affect demand. "If we continue consuming, with the pace of consumption we have we are nowhere near the peak, because China is not back yet," the UAE's Energy Minister Suhail Al-Mazrouei said last week, as quoted by Bloomberg. "China will come with more consumption." Indeed, China is expected to soon return to normal, despite news of an "explosive" new Covid outbreak in Shanghai. The outbreak has prompted mass testing in a Beijing district, but it remains to be seen whether the outbreak will spread enough to necessitate a lockdown per China's zero-tolerance policy toward Covid and affect the economy of the Asian powerhouse. If it doesn't, the summer will be painful at the pump and at any shop that sells goods transported by truck. "We are at $120 without China, so when China comes back, oil is going to go higher," Amrita Sen, chief oil analyst at Energy, said recently, also quoted by Bloomberg. "Even with high prices, demand is continuing because people, they want to travel, they want to get out. And the second thing is that governments around the world are subsidizing prices," Sen noted. The subsidy approach that many governments adopted to fight soaring energy prices has been criticized by many on the grounds that instead of discouraging greater fuel use, which would eventually weigh on prices, subsidies, in fact, encourage more fuel use, hence helping keep prices higher. Meanwhile, the latest about OPEC+ production is not particularly encouraging either. A Platts survey suggested that the extended cartel had once again fallen well short of its production target in May after OPEC alone produced 2.7 million bpd less than agreed in April. Nigeria's production is at the lowest since Platts has been doing the surveys, and Libya just said it was losing 1.1 million bpd in production daily due to continued fighting. "With only a handful of ... OPEC+ participants with spare capacity, we expect the increase in OPEC+ output to be about 160,000 barrels per day in July and 170,000 bpd in August," JP Morgan analysts wrote in a note last week, reinforcing the grim outlook for oil prices during the northern hemisphere summer when demand rises on increased travel. The energy minister of Saudi Arabia has been saying for a while now that it is underinvestment which is to blame for the current oil price situation. Refinery shutdowns have also contributed to the undersupply of fuels when demand is on a strong rise, and, of course, sanctions against Russia have not exactly helped. According to Bloomberg, the supply situation at the moment is so tight that even if Saudi Arabia and the UAE both deploy their spare capacity, it would not be enough to offset the Russian supply losses. Virtually no one is forecasting a decline in oil prices this time. But a growing number of analysts and observers are beginning to warn about the possibility of a recession. As The Financial Times' David Sheppard put it in a recent column, "China is reopening. People are flying again. Demand is going in the wrong direction. All these factors point to rising oil prices until a level is reached that reduces consumption, probably by triggering an economic slowdown large enough to curtail demand. In other words, a recession for many economies." It is going to be a very hot summer for oil prices. Economies are just as reliant on hydrocarbons now amid the energy transition as they were twenty years ago before the transition had started properly.'
13/6/2022
23:09
mount teide: The Oil Price Shock Will Reverberate Into Next Year - Javier Blas - Bloomberg today 'There’s no end in sight for the price spike as supply struggles to keep up with demand. Wall Street may be abuzz with talk of recession next year, but it’s a different story in the energy market. Most traders, policy makers and analysts see oil demand growing through 2023 and supply struggling to keep pace. In private, Western officials worry Brent crude will reach $150 a barrel soon from about $120 now. Some fear it keeps going higher, with wild chatter about oil hitting $175 or even $180 by the end of 2022, driven by post-Covid pent-up demand and European sanctions against Russia. And the shock won’t end this year. Amid widespread fears of an oil price spike this summer, another storm is developing over the horizon: The oil shock won’t end in 2022. It’s almost certain to roll into next year. Despite fears of a recession, oil traders still anticipate that global crude consumption will expand in 2023 While everyone waits for the IEA’s forecast, commodity trading houses, oil companies, and OPEC nations and Western consuming countries have already run their numbers. Their consensus for 2023 oil demand varies between an extra 1 million barrels per day and 2.5 million barrels per day. In 2022, it is likely to have grown by 1.8 million barrels a day, according to the IEA, to about 100 million. Typically, anything above 1 million a day in annual demand growth is seen as quite robust. The supply side doesn’t look a lot better. At best, oil traders expect Russia to hold to its current level of about 10 million barrels a day, down about 10% since its invasion of Ukraine. But many believe that it may drop another 1 million barrels, or even 1.5 million barrels. The OPEC+ cartel, which started 2022 with ample spare production capacity, is reaching its own limits, too. “With the exception of two-three members, all are maxed out,” OPEC Secretary-General Mohammad Barkindo said last week, referring to Saudi Arabia and the United Arab Emirates. The result is likely the third consecutive year of drawing down existing oil stocks — and that’s after a precipitous decline in global crude and refined products inventories in the last 18 months. So far this year, Western governments have mitigated the impact of falling supplies by releasing the most barrels ever from their strategic petroleum reserves. Without further action, the emergency releases will end in November, removing the biggest cushion from the market. The refining sector represents another problem. The world has effectively run out of spare capacity to turn crude into usable fuels like gasoline and diesel. As a result, refiners’ profit margins have exploded, which in turn means that consumers are paying far more to fill their tanks than oil prices suggest. The industry measures refining margins using a rough calculation called the “3-2-1 crack spread”: Three barrels of West Texas Intermediate crude are refined into two barrels of gasoline and one of distillate fuel, such as diesel. From 1985 to 2021, the crack spread — the gap between the price of crude and the refined products — averaged about $10.50 a barrel. Last week, it surged to an all-time high of nearly $61. Very few new refineries will come on stream in the next 18 months, suggesting that cracking margins may stay sky high for the rest of the year and into the new one. The 2023 outlook has some big question marks – and most of them relate to government action. Each can shift supply and demand by 1 to 1.5 million barrels a day, more than enough to move prices significantly. The most important one is the duration of oil sanctions on Russia, themselves linked to the invasion of Ukraine. The others are China’s zero-Covid policy, Western sanctions on Iran and Venezuela, and the release of strategic reserves. Oil price shocks are typically remembered by their height. But that’s only half of the question; the other half is their duration. And that’s where the 2023 forecast outlook matters most. The last oil price spike was brief. After a gentle price increase throughout 2007 and early 2008, the rally accelerated in May 2008, with prices climbing above $120. By July, oil prices had reached their peak of $147.50 but by early September, they’d fallen to under $100. Brent traded below $40 by December 2008. Carbon Copy? The 2021–22 oil price rally has so far tracked very closely the 2007–09 spike and collapse — but they are about to diverge, with prices staying high in 2022 and 2023 Until now, the 2021-22 oil price rally has been a carbon copy of the 2007-08. In spooky fashion, the price charts track in near perfect sync. But any hope the oil market is about to follow the pattern of what happened 14 years ago misreads reality. Oil prices aren’t about to crash. A better analogy is the period between 2011 and 2014: oil prices never revisited the 2008 record high but still stayed above $100 almost without interruption for more than 40 months. Brent has already averaged $103 a barrel in 2022, above the 2008 annual average of $98.50 a barrel. The next six months may see higher prices still. But far more important is how long those prices remain elevated. For now, there’s no end in sight.'
09/6/2022
15:35
eaglehaslanded: All MA's are on the rise, expect higher share price as MA 20 acts as a floor under share price. Target is 0.43 cad as this is resistance, noteworthy 0.45 is analyst TP.
26/5/2022
10:31
mount teide: btb - The share price performance of SAVE is in line with the overwhelming majority of the O&G sector over the last 2-3 years/through the Covid period, which unfortunately occurred after the counter cyclical O&G, Commodity and Shipping sectors surged off the 2016 lows following a brutal 7 year long collapse, only to be knocked back down to their 70 year lows by Covid in April 2020 . Since then we have seen a very fast recovery in the oil price and freight rates....similar to 2000-2002, it will only be a matter of time for their now record FCF producing equities to catch up with the recovery in the commodity price and close this value gap. Posted this on the JSE thread about a month ago - on the same subject: November 2019 was the oil industry pre Covid peak, following which the oil demand/price collapsed, wiping between 60%-90% off the market capitalisations of virtually all the O&G sector, including the Majors. The best managed companies like Jadestone entered 2020 in survival mode, cutting CAPEX back by 60-70% to mainly Statutory work, and reducing costs wherever they could - Jadestone took another 10-15% out of their OPEX/bbl in 2020, on top of the circa 30% they had removed since taking over the operatorship of the Stag and Montara fields. From a market timing perspective, KIST IPO'd perfectly in late 2020, into the early months of the strong O&G price recovery from the Covid record lows. What is as certain as night following day, is that if KIST had IPO'd in November 2019, their performance would have mirrored most of the rest of the sector. Since then, unlike Jadestone, around 90% of O&G sector, including the majors like Shell and BP, are still yet to get back to their pre Covid Nov 2019 share-prices. KIST benefitted from coming to AIM when the sector was flat out on its back and asset prices close to or at record lows. It will be interesting to see how they perform over the longer term, when they will likely have to pay considerably higher prices for new assets. Since coming to AIM in late 2018, JSE has averaged a circa 35% CAGR(plus Dividends), while my best performing O&G sector investment Touchstone has returned a 73% CAGR since its summer 2017 IPO(been as high as 100%). These two companies are in the best 5% of performers in the O&G sector measured from their IPO dates. There is a very good reason why KIST has generated 235% of capital growth since Nov 2020....and my SAVE investment has generated 252% of capital growth since investing in late December 2020, and my 1% AXL investment has returned a 342% CAGR since building the position there 3.5 months ago......its because the investments were made AFTER the oil and gas price had commenced a strong recovery from the record lows in Q2/2020. Performance of selected O&G Sector Companies from Jadestone's London IPO on 28th September 2018 though to early March 2022(KIST and Arrow's performance are as of today's date.) +341% - Touchstone Energy +295% - Serica Energy +235% - KIST +180% - Jadestone Energy +132% - Arrow Exp +30% - Brent Price Today -28% - Brent Average Price -5% - Exxon -16% - Savannah Energy -21% - Enquest -22% - Cairn -22% - Shell -35% - BP -37% - US Oil Fund ETF(USO) -77% - I3E -80% - Tullow Energy -83% - Premier Oil Brent $82.72 - 28th Sept 2018 $108 - Today $59.00 - Average since Sept 2018 By any objective analysis, since Jadestone's September 2018 London IPO listing, the share price performance of Touchstone, Serica, KIST and Jadestone Energy relative to the wider O&G market and Brent has been outstanding. From a 'fundamentals' viewpoint the four companies are positioned extremely well at today's O&G prices to continue that outperformance in 2022 and beyond. An interesting observation is that since the $80+ oil price peak in September 2018 when JSE came to AIM, the vast majority of the O&G sector has performed very close to the average -28% move in the price of Brent. Today's Brent price is 32% above the Sept 2018 reference point and 83%($49/bbl) above the average price since that date. Suggesting, that over the last 3 months a huge value gap has opened between the market valuations of much of the O&G sector and their current cash flows. AIMHO/DYOR
26/5/2022
09:37
zeusfurla: 78s From a trading perspective you may have a point given the recent share price rise. However, the fundamental FCF indicate AXL is still undervalued for several reasons. - there is relatively little free stock available - few PI's seem to be selling at the moment - there is multiple news flow to come this year at high CoS >80% - Oso Pardo licence could add significant value but is not priced in to any degree - oil prices have further to go this year. - analyst notes showing significantly higher target price - excellent management with a track record of delivery on multiple occasions - good in-country relationships The main short-term downside risk is that PI's could be overly sensitive to the upcoming election results and top-slice. However, any impact is likely to be over the medium/longer term and not likely to affect the current drilling programme. It's always possible that the share price could take a breather but my gut feel based on all of the above is that the share price will rise further even in the absence of news over the next month. All IMHO.
13/5/2022
14:53
mount teide: Sorry, But for You, Oil Trades at $250 a Barrel - Javier Blas / Bloomberg 'If you are the owner of an oil refinery, then crude is trading happily just a little above $110 a barrel — expensive, but not extortionate. If you aren’t an oil baron, I have bad news: it’s as if oil is trading somewhere between $150 and $275 a barrel. The oil market is projecting a false sense of stability when it comes to energy inflation. Instead, the real economy is suffering a much stronger price shock than it appears, because fuel prices are rising much faster than crude, and that matters for monetary policy. To understand why, let’s examine the guts of the oil market: the refining industry. Wall Street closely monitors the price of crude, particularly a grade called West Texas Intermediate traded in New York. It’s a benchmark followed by everyone, from bond investors to central bankers. But only oil refiners buy crude — and therefore, are exposed to its price. The rest of us — the real economy — purchase refined petroleum products like gasoline, diesel and jet-fuel that we can use to run cars, trucks and airplanes. It’s those post-refinery prices that matter to us. hTTps://www.washingtonpost.com/wp-apps/imrs.php?src=https://arc-anglerfish-washpost-prod-washpost.s3.amazonaws.com/public/LPUL6SGPMQI6ZCDL353BQPJDH4.jpg&w=916 Typically, the price of crude and the price of refined products go up and down in tandem, almost symmetrically. What’s in between is a refining margin. In normal times, WTI is a handy price shorthand for the entirety of the petroleum market. So when, say, U.S. Federal Reserve Chairman Jerome Powell looks at WTI, he gets a neat picture of the whole energy market. But we aren’t in normal times. Right now, the traditional relationship between crude and refined products is broken. WTI is anchored around $100-$110 a barrel, suggesting that — in barrel terms — gasoline, diesel and jet-fuel prices shouldn’t be much higher, once you add the average refining margin. In reality, they are a lot more expensive. Take jet-fuel: in New York harbor, a key hub, it’s changing hands at the equivalent to $275 per barrel. Diesel isn’t far away, at about $175 a barrel. And gasoline is at about $155 a barrel. Those are wholesale prices, before you add taxes and marketing margins. What’s changed? Refining margins have exploded. And that means energy inflation is far stronger than it appears. Oil refineries are complex machines, capable of processing multiple streams of crude into dozens of different petroleum products. For simplicity’s sake, the industry measures refining margins using a rough calculation called the “3-2-1 crack spread”: for every three barrels of WTI crude oil the refinery processes, it makes two barrels of gasoline and one barrel of distillate fuel like diesel and jet-fuel. From 1985 to 2021, the crack spread averaged about $10.50 a barrel. Even between 2004 and 2008, during the so-called golden age of refining, the crack spread never surpassed $30. It rarely spent more than a few weeks above $20. Last week, however, the margin jumped to a record high of nearly $55. Crack margins for diesel and other petroleum products surged much higher. There are four main reasons behind the explosion in refining margins. First, demand — particularly for diesel — has rebounded strongly, depleting global inventories. In some markets, like the U.S. East Coast, diesel stocks have fallen to a 30-year low. Despite rising prices and fears of an economic slowdown later this year, oil executive say they see strong consumption for now. “Demand is not that easily destroyed,” Shell Plc Chief Executive Officer Ben van Beurden told investors last week. Second, the U.S. and its allies have tapped their strategic petroleum reserves to cap the rally in oil prices. That has provided extra crude, which has put a lid on WTI prices, but it hasn’t addressed the tightness in refined products. Only a small fraction of the emergency release is in the form of refined products, and only in Europe. Third, and perhaps most importantly, refining capacity has declined where it matters for the market now, and the plants that are operating are struggling to process enough crude to satisfy the demand for fuel. Martijn Rats, an oil analyst at Morgan Stanley, estimates that outside China and the Middle East, oil distillation capacity fell by 1.9 million barrels a day from the end of 2019 to today — that’s the largest decline in 30 years. The downward trend started well before the pandemic hit, as old Western refineries struggled to compete, environmental regulations increased costs and the unfounded fear of peak oil demand amid the energy transition prompted some companies to close plants. The fuel-demand collapse triggered by Covid-19 only turbo-charged the trend, resulting in dozens of refinery operations shutting down for good in Europe and the U.S. in 2020 and 2021. New capacity has emerged in China. However, Beijing tightly controls how much fuel its refiners can export so that capacity is effectively out of reach of the global market. “Has the oil market hit the refinery wall?,” Rats asked in a note to clients last week. “Unusually, the answer appears to be yes.” Fourth, are the sanctions and unilateral embargos — also known as self-sanctions — on Russian oil. Before the invasion of Ukraine, Russia was a major exporter not just of crude, but also of diesel and semi-processed oil that Western refiners turned into fuel. Europe, in particular, relied on Russian refineries for a significant chunk of its diesel imports. The flow has now dried. Europe not only needs to find extra crude to produce the diesel and other fuels it’s not buying from Russia, but, crucially, it needs the refining capacity to do so, too. It’s a double blow. Oil traders estimate that Russia has shut down 1.3 million to 1.5 million barrels a day of refining capacity as result of the self-sanctions. Who’s benefiting? The pure-play oil refiners, which are quietly enjoying record-high profit margins. While OPEC and Big Oil get the blame, independent refiners are cashing-in. The sky-high crack margins explains why the share prices of U.S. refining giants Marathon Petroleum Corp. and Valero Energy Corp. have surged to all-time highs. The longer the refiners make super-profits, the harder the energy shock will hit the economy. The only solution is to lower demand. For that, however, a recession will be necessary. '
20/4/2022
11:17
mount teide: h&t - great note. Arrow Exploration - 20th April 2022 Share Price: £0.15 Target: £0.45 Very encouraging drilling results at Colombia well • The RCE-2 well has encountered a total net pay of ~80’ across five separate known horizons. Importantly the C7 sand (the primary target) was encountered 10’ higher than expected and 25’ higher than in the RCE-1 well. Overall 30’ of pay was encountered in the C7 sand. This suggests larger volumes than expected. • The well also encountered a total ~50’ of pay in the Gacheta sands, including 16’ in the C sand and 25’ in new zones that were not encountered in the RCE-1 well. This also suggests potentially larger volumes than initially anticipated. • The quality of the sands is very high with ~30% porosity. • The Gacheta sands will now be tested and will potentially be put in production (assuming a good result). If the Gacheta does not deliver high flow rates, the shallower C7 sand (the primary target) will be tested and put in production. • This is a very good start for the drilling campaign and, pending the results of the flow tests, we re-iterate our £0.45 per share target price. We continue to forecast that Arrow could produce ~1,500 bbl/d of oil in 4Q22. Securing a licence expansion at Oso Pardo in the Middle Magdalena Velley could add 14 mmbbl of oil reserves to Arrow (unrisked NAV of ~£0.90 per share). Next steps The RCE-2 development well will be followed by the RCS-1 development well (which is expected to spud in early May). Assuming success at RCE‑2 and RCS-1, the Company will evaluate the potential fora fourth development well in 3Q22. Valuation and cashflow We forecast Arrow will generate US$45 mm free cash flow by YE23 and US$70 mm by YE24. Even following the recent share price appreciation, this would translate into YE23 net cash being 10% above the current market cap while YE24 net cash would be >60% above the current market cap. Our Core NAV based on the company’s 2P reserves is £0.17 per share with a ReNAV of £0.45 per share.
18/4/2022
10:55
mount teide: We know the best run oil companies today are extremely profitable at $70 Brent, as demonstrated by the record free cash flows the majors reported in Q4/2021. Even without the huge impact shock to oil supply of Russia invading Ukraine, global oil production growth was always going to be severely constrained throughout this decade by the catastrophic circa 65% reduction in E&P Capex Investment since the oil price collapse in 2014( after averaging circa $110/bbl for 5 years before adjustment for inflation)......It's worth noting there was no recession during that long period of relatively high oil prices, but there was a recession during 2000-2002 when oil averaged $25/bbl. The myth of high oil prices: $190/bbl - 2008 / Brent all time high price adjusted for inflation $147/bbl - 2008 / Brent all time high price - inflation unadjusted $122/bbl - Average Brent price between 2011 and 2015 - inflation adjusted $105/bbl - Average Brent price between 2011 and 2015 - inflation unadjusted $113/bbl - Average Brent price from 2008 GFC to 2015 - inflation adjusted $98/bbl - Average Brent price from 2008 GFC to 2015 - inflation unadjusted $91/bbl - Average Brent price from 2008 GFC to 2021 - inflation adjusted $79/bbl - Average Brent price from 2008 GFC to 2021 - inflation unadjusted $70/bbl - Brent spot price when the Biden Administration were screaming in Q4/2021 for OPEC+ to do something about "high oil prices" ! During the recession that started in 2000, the Ftse fell 50% by 2003 and was still in correction territory some 20% down by 2006. The counter cyclical commodity and shipping market bottomed in 2000 and by 2006 had seen oil go up by 205% and copper by 370% - many high quality, recession leaned, low operating cost, oil and copper sector equities leveraged to these price increases, went on to 10 bag or more. The Baltic Dry Index(cost to ship commodities around the world) first peaked in this century in 2004 at 366% up, going on to make an all time high in 2008 at 823% up. Oil went on to peak in 2008 at 539% up and copper in 2010 some 574% up. A commodity and shipping sector recession then ensued until 2017, quickly followed the the Covid Global Pandemic, during which the BDI dropped 98%, oil 83% and copper 65% peak to trough. I'm expecting oil, copper and nat gas pricing to remain very strong for most of the rest of this decade ....and their equities (leveraged off the price of their production) to perform even more strongly, regardless as to whether we have a long overdue recession in the West to correct inflated property and general equity market asset prices as in the early 2000's. AIMHO/DYOR
05/4/2022
09:09
mount teide: JB thanks - reads well. Arrow Exploration - Auctus Advisors Note - 5th April 2022 Share Price 13p - New Target Price 45p Production and reserves growth in Colombia • We are increasing our target price from £0.30 per share to £0.45 per share on our new higher oil price assumptions. • Arrow has started an extensive drilling programme in Colombia with the RCE-2 well to grow oil production at the Rio Cravo Este field and to explore for oil at Carizales Norte. The RCE-2 development well will be followed by the RCS-1 development well (which is expected to spud in early May). Assuming success at RCE‑2 and RCS-1, the Company will evaluate the potential fora fourth development well in 3Q22. • All the wells are quick to drill and we forecast will add 400-800 bbl/d per well net to Arrow. • The RCE-1 producing well could also be recompleted in 3Q22. • Given the favorable fiscal terms and low costs, the production from these fields is highly cash generative and applying our latest oil price forecast has a significant impact on our cashflow forecasts. Overall, we forecast Arrow could produce ~1,500 bbl/d of oil in 4Q22. • Given the strength of natural gas prices in Canada, Arrow is also considering tying-in another gas well in Canada (East Pepper). • Securing a licence expansion at Oso Pardo in the Middle Magdalena Velley could add 14 mmbbl of oil reserves to Arrow (unrisked NAV of £0.90 per share). Brent price forecasts With double-digit inflation on the horizon, constrained global oil supply, prolonged restrictions on Russia and demand for hydrocarbons stubbornly high, we have decided to increase our Brent price assumptions from US$82/bbl to US$100/bbl in 2022, US$67/bbl to US$100/bbl in 2023, US$65/bbl to US$92/bbl in 2024, US$65/bbl to US$74/bbl in 2025 and US$65/bbl to US$70/bbl from 2016. Valuation and cashflow Under our new Brent price assumptions and reflecting the currently planned drilling programme, we forecast Arrow will generate ~US$45 mm free cash flow by YE23 and ~US$70 mm by YE24. This would translate to YE23 net cash being 35% above the current market cap while YE24 net cash would represent 2x the current market cap. Our new Core NAV based on the company’s 2P reserves only is £0.17 per share with a ReNAV of ~£0.45 per share. steph
Arrow Exploration share price data is direct from the London Stock Exchange
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